It’s Tuesday and we’ve got special guest Steve Greenfield to give us his hot takes on the Top 150 Dealer list as well as Tesla’s decision to halt its low cost EV. We also talk about the Arizona Attorney General’s ruling against one Dealership for not honoring advertised prices, as well as a look inside yesterday’s special Delta eclipse flight.
Show Notes with links:
Greenfield’s takes on:
Desert Toyota in Tucson, Arizona, agrees to a $60,000 settlement for not honoring advertised vehicle prices, the Arizona Attorney General's Office reports.
Yesterday, $6B worth of consumer spending hit the market due to the total solar eclipse and Delta Air Lines jumped in on the action offering a special flight from Dallas to Detroit, aligning with the solar eclipse's path, providing passengers with a once-in-a-lifetime experience from 35,000 feet.
Hosts: Paul J Daly and Kyle Mountsier
Get the Daily Push Back email at https://www.asotu.com/
JOIN the conversation on LinkedIn at: https://www.linkedin.com/company/asotu/
Read our most recent email at: https://www.asotu.com/media/push-back-email
It’s Tuesday and we’ve got special guest Steve Greenfield to give us his hot takes on the Top 150 Dealer list as well as Tesla’s decision to halt its low cost EV. We also talk about the Arizona Attorney General’s ruling against one Dealership for not honoring advertised prices, as well as a look inside yesterday’s special Delta eclipse flight.
Show Notes with links:
Greenfield’s takes on:
Desert Toyota in Tucson, Arizona, agrees to a $60,000 settlement for not honoring advertised vehicle prices, the Arizona Attorney General's Office reports.
Yesterday, $6B worth of consumer spending hit the market due to the total solar eclipse and Delta Air Lines jumped in on the action offering a special flight from Dallas to Detroit, aligning with the solar eclipse's path, providing passengers with a once-in-a-lifetime experience from 35,000 feet.
Hosts: Paul J Daly and Kyle Mountsier
Get the Daily Push Back email at https://www.asotu.com/
JOIN the conversation on LinkedIn at: https://www.linkedin.com/company/asotu/
Read our most recent email at: https://www.asotu.com/media/push-back-email
Welcome to Wednesday, it's April 9, it's Tuesday. Actually. It's Tuesday from nine. I am Steve Greenfield in the studio to remind me what day it is. Top 150 's Arizona Attorney General, the delta, Eclipse flight and whatever else I can get Steve to talk on Steve, welcome to the show this morning. How are you?
Steve Greenfield:Well, it's good to be back. Good to be back. Thanks for having me.
Paul J Daly:Oh, man, it's so great whenever Kyle gets out there on the road and I can finally do what I want on this show. It's just I don't know Kyle, and so many of our mutual friends are at the Kane friends and family event in Lexington, Kentucky. And so if you're there we miss you. We wish we were with you. But I will hold down the fort while you're doing nothing but you know, enjoying David Kane's hospitality. One of the best events in automotive for sure. Every
Steve Greenfield:one of the best guys in automotive for sure. Without a doubt.
Paul J Daly:Just want to let you know if you haven't ASOTU CON is only 35 days away. And I know it's so so soon and so far away. But once we tick under 30. In the asoto verse over here at home base, we go into full fledge mode. Actually, we live in that spot where
Steve Greenfield:a question for you like if I if I'm going to make the investment to come up there as an attendee? What do you hope on the last day when I'm walking out of the room, and I reflect back as an attendee? What do you hope is top of mind for an attendee?
Paul J Daly:Gotcha two things. First, first of all, we our premise for making a soda con is that most conferences send you home feeling exhausted and overwhelmed. And so a soda kind of specifically curated to help you leave, feeling energized and inspired. So I know it's kind of a high level thing. But that's the first one if you're leave feeling energized, ready to get back in the store and make some change or back to your industry partner, develop some products, serve dealers more, number one. The second thing right behind that, that only happens if you have an implementable thing, and I'm not satisfied. And at ASOTU CON, we're satisfied with one, right, everybody fill your notebook for sure. And people do. But if you have one thing, whether that's one relationship, whether that's one practical best practice to implement one thing to try, we hope you go home with one thing. And if you look through the session list, there are lots of one things in there if even if you just read through the agenda, whether you're fixed ops, you're in marketing, whether you're leaving the dealership, thinking about mergers and acquisitions, we have a full kind of buffet list of things for anyone showing up. So go home inspired, energized and ready to implement the one thing, and I often feel like the one thing is best when connected with a person that you met or a conversation that you
Steve Greenfield:had. Yeah, well, that's true. I mean, and I agree with you, wholeheartedly. You know, we've got a lot of conferences in the industry. And I think that those two things, you know, a lack of enthusiasm and being worn out. And and most importantly, do I have something tangible? I can take back and implement? And if you can check both, both those boxes, I mean, kudos to you guys for doing this. Yeah,
Paul J Daly:well, we'll do our best. And I think anyone who has been there, who was there last year is going to get a lot more and more intentionality of what you experienced last year, we've expanded into some breakfast sessions this year, we felt like That was an underutilized time at most conferences, knowing that like, you know, half of the people won't come down to breakfast. Anyway, two thirds. So between seven and eight o'clock every day, there's something going on. On day one, there is a well Can women of color automotive network breakfast where they're going to have panels, and their community is going to get together. Day two, the Maryland auto dealers association is actually holding their annual meeting in one of the studio rooms. Oh, that's clever. Yeah, they reached out to us and they said, Hey, because they showed up last year, kind of like to kind of think feel their way around like who are who are these people? Like what are they trying to do in our town? And so a lot of value built a great relationship. Yeah. So they're getting actually they said, like very higher than usual dealer turnout, because of being tethered to events, we're excited to host them. Also, this is a this is an out of the box one. On day two, between seven and eight. I am bringing the daily family therapist in for a session basically around how can you be a successful busy professional and a great parent 10 years ago, you know, I didn't realize the drain that my you know, my driven nature was having on my family. We ended up getting his family counselor, he changed the trajectory of our family. And I posted something on LinkedIn about I don't know it's about a few months ago, and people overwhelmingly responded to like we would love something like this. So we're having it. I'm bringing them with me. So seven, eight, we're gonna answer questions we're gonna go to Do some best practices and so you're
Steve Greenfield:not like lying on the couch or on stage, we're not gonna have a therapy session like in vitro?
Paul J Daly:Well, I mean, yeah, no, but it's probably gonna end up being that because you can be cool. Now, it'd be great. I'd
Steve Greenfield:love to see, I would pay to see that one of your therapies or just let me be a fly on the wall.
Paul J Daly:Just get a couch. It's a lot there used to be. So it's his name is Mike Lynch. If you go to ASOTU con.com, you can actually if you search the agenda, you can see more information about the session, but you won't find him anywhere on social media, which is probably why he's a really, really great counselor, marriage, family therapist. So yeah, very cool for everything, everyone and can't forget, I can't wait for everyone to meet, we'll get Dara, The New York Times bestselling author of unreasonable hospitality, Kyle, and I spent some time with him in New York City a couple of weeks ago, and he did not disappoint. You know, some people are different in person than you see him on, you know, on TV. And, you know, he's amazing. And I think he's going to so some really important principles into automotive specifically around hospitality. And he was fine in our podcast conversation, and it's out. Now, if you go to Auto Collabs, buy a soda, if you search them on a podcast platform, you can see it or hear it. He when He was thinking about hospitality and automotive, he wasn't even thinking about fixed ups. He was talking about the sales things. And I kind of chimed in, and I said, you know, I think the bigger opportunity is actually in service, everyone shows up, you know, not wanting to be there in the first place, if you have a really great opportunity to turn that around. And you can see the light bulb go off for a minute. And so hopefully bring some of that. And that's some of the energized and inspired feeling you have when you leave from our final keynote there. So
Steve Greenfield:what's the what's the biggest surprise that you've had spending time with him? Where you hide like, oh, wow, I wouldn't have expected that. Can you spend some time within an hour? Yeah, yeah,
Paul J Daly:I think the biggest surprise, I've spent time with a lot of people who have done, you know, like big things, or written popular books or celebrities. And, you know, I think the biggest surprise is always when you meet someone who is 100% focused on you, when they're in the room with you. They're not somewhere else. They're not thinking. And his mind was actively working on questions and problems, specific to the questions we were asking him. And a very, and obviously someone as sharp as he is. Very quick study caught on very quickly. I knew that right away when he walked in, and he saw these love people more than you love car shirts on. And he looked at it. He's like, Oh, I like that. And fortunately, we brought one for him. And so he put it on immediately. And he was like, he said, This is a shirt I'll wear. So. So yeah, so I think that was probably the biggest surprise. And yeah, so hopefully you can come hear him speak and then get to meet him in person. We got some thoughts and plans on how we can maybe get him a little bit more more dialed into the auto ecosystem.
Steve Greenfield:Nice. Can't wait, can't wait.
Paul J Daly:All right, we're gonna talk about some news today. And while I have you, I love to get your hot takes on some things that are going on an automotive, automotive ventures.com, you release an email every week. That is kind of what you're paying attention to stories and some commentary. Then once a month, you do your intel report, which is a little bit more in depth on a certain topic or two. So these are two things that were on your list. We talked about them yesterday on the show, just would love to get your thinking around these. Number one, the Automotive News top 150 dealer list came out yesterday, a lot of movement on that list by some some surprises, some things we probably expected. What's your overall take on the list this year? And how it might be reflecting some of the things that are going on?
Steve Greenfield:Yeah, it's a good question. It's always a list of checkout. And, you know, wherever you are in the automotive ecosystem, pay pay attention to it, right? Because these are the dealers that are getting more concentrated, you know, have an aggressive acquisition policy and are rolling up, you know, dealers, right, so there's, for every cell, there's a buyer, and these folks are the primary buyers rolling up and tucking in dealerships make a few observations, one is you we are getting more concentration amongst fewer buyers, right. And dealers, I think are seeing opportunities to consolidate and take out costs, centralize things like accounting, HR, etc. But you also can up the sophistication around centralizing vehicle acquisition, for example, centralizing training, centralizing processes, etc, right? So so I think dealers are seeing say, whether I go from one dealer to five or five to 15, or 15 to 50, there are different breaks there and different things that I can start to centralize and bring competencies and best practices across dealerships. On the flip side, I think it's pretty, pretty interesting, Paul, you know, for 20 of it almost 25 years in the industry. And you look at any other industry, there's been a lot more consolidation, right, for whatever reason, and we can hypothesize about this, it'd be good to get your thoughts to, why don't we ever break through one owner owning more than 250 to 300 dealerships and part of that it? Yes. Are these OEM franchise frameworks where you can only own so many Mercedes stores or BMW stores because they want to make sure that You know, no one sort of vendor to them from the OEMs perspective gets too much weight, right? Too much influence. But at the same time, you would think that by now, we would have owners that had 1000 stores or 3000 stores like any other industry, there's a lot more concentration that automotive. So it's something for the viewers to think about is like, why haven't we seen much more aggressive concentration at the top? I have some hypotheses. But it's interesting for you to think about too, is like, in 20 years, will we still be as fragmented? Like, will we see a lot more 200 or 300? Store owners? Are we ever going to see one owner owning 1000 stores? And it looks like we may never see that in automotive? That's,
Paul J Daly:that's a very interesting question. And when you originally said, I wonder what the thoughts are on this. I mean, I think if you asked us 24 months ago, we would have a little bit of a different perspective on this, because there's so much talk around agency model, I think it made a lot more sense when that was a key narrative. That scale of that size would make sense. But since we've moved away from that conversation, the reason I think one of the two things, number one, I think it's just the legacy of the industry. And the auto industry and franchise network has been such a part of the fabric of local communities, I think that those roots are so deep, that they're not easily pulled up. And I can't say the same like, even if you think about some of the things that like a Walmart brought to the table when it came to like hardware stores and local things of that nature, they didn't have the kind of economic power that an auto dealership has. Therefore, I think they didn't have the economic impact that an auto dealership has. So I think that there's just, it's just like, when you pull up something that has deep roots, you're like, Oh, let me pull this one up and move it. And there are some things that look like they don't have that deep roots. And then when you realize you start digging it up, you're like, Look at this. And I think that's the auto industry. So I think that naturally slows the pace of it down. I also think it's very difficult to deliver at scale, across multiple geographies. And I think that it's easy to underestimate that. I think that that's one of the founding reasons that OEMs understand they need dealers, because it is difficult to execute at scale across multiple ways people are expect to do business, driving habits, a big difference across the country, you go like to Oklahoma, and it's a lot different than you're going to going to get in Ohio, for instance. So those are those are a couple things that come to top of mind when you ask that question, what's what's your prevailing thought?
Steve Greenfield:No, I think you're right, too. I mean, I weigh more into the latter, you know, we have some of the investors in our funds, who are dealers who have bought stores outside of sort of their core geography and then eventually divested them, because it's just too much to manage them when they're too far remote, right? So I think there is that, I mean, if you're like an Lithia, or an auto nation, you need to have a lot of systems and processes, and sort of, and there's pros and cons of that, right? You lose some of what you mentioned, the former the local sense of community, autonomy, decision making, et cetera, you know, you can become the McDonald's of a dealership by having uniform processes across the nation. But it's really, really hard to implement those given that there are strengths to having nuances and idiosyncrasies in local geographies. Right. So I think, you know, if you and I were running a big conglomerate, of dealerships, we would wrestle with this right? How much do you allow the local GM, the local management team to have autonomy to cater to the needs in that local geography? versus how much do we centralize and, you know, have uniform processes across the nation? And I imagine there's a lot of conversations in these boardrooms of these larger dealer groups, especially the ones that are are assimilating right and, and growing very quickly. He's like, how much do we start to implement uniform processes, right? Or how much do we allow the autonomy of the local local operator, and we see different philosophies, right. There are very different philosophies out there. I think there are pros and cons to each but either way, you can't just one size doesn't fit all. If it did, we would have the McDonald's and dealerships and it just is not the way that the industry has played out. That's
Paul J Daly:right. And that's why I also think that like the middle is getting sold so thick, right? We're starting to see the small groups become mid sized group, you're talking about my waistline right now. Right? No, definitely. Always looking trimming on the go. And so I think I think we're just starting to see a lot of that like that center point, if you look at the difference between the rankings on this between, say, like, position 40, and position 70, you're gonna see very little play in size, right? There's just, it could go either way, just by, you know, several 100 units or 1000 units. And so I think this is a more rational way to scale and a lot of these groups are scaling relatively regionally, right, three hours away, five hours away, right. Some of them even like leverage, I don't want to group they they leverage your private plane. And they have they have stores that are probably about 600 miles apart, and they'll visit all the regions No problem in one day and you know, be at home for dinner. So I think those those are gonna continue we'll see, then 1000s A long way to go. I don't even know if Brian divorce got the got the track speeded him to get to 1000 We'll see what we definitely got the energy for it. We could do it
Steve Greenfield:over under on it like, you know, what does the industry look like in 10 or 20 years, but it'll be interesting to see what people think. But I think this will be a good topic of conversation. We can we can maybe foster some of this on LinkedIn and see what people think that's
Paul J Daly:a great Congress. Let's do that. Let's do that. Second story I want to talk about is Tesla's alleged decision to halt the production of its low cost Evie Tesla hasn't said this is true yet. But Reuters, sorted cited five sources, three people, several documents, say like, Hey, they're laying off this leaning into the robo taxi. Elon Musk came out shortly after this said Reuters is lying as usual. And they also said we're going to show you the we're going to show you the robo taxi on August 8. What do you make of all this? Well,
Steve Greenfield:I mean, he's got to be challenged with you know where Tesla is currently, right. I think a lot of the models are long in the tooth in terms of like, they need a redesign. It hasn't really been Tesla's Mo, since the beginning to have redesigned models like other automakers, part of the reason that they have higher operating profits. And you know, I think that he's been very clear that, you know, their model is going to be like Gillette, right? Give away the razor the the handles and sell the razor blades. In his case, the car is just a vehicle to literally, to deliver software. And, you know, he's always about full self driving and full self driving as a future. And you know, I think in the next breath, he said, By May 8, we're going to have an announcement about, you know, Robo taxis. And what that means, we don't know exactly, we don't think that's going to be a brand new car. That's a robo taxi, just more progress around full self driving. So I think that if he can, if he can get more vehicles into more consumers hands, and then upsell them software products, he can be valued as a tech company. The threat now is does he start to look like an automaker with all automakers challenges? Hey, you know, we're producing more vehicles than there's demand for so we're sitting on inventory. So we need to discount those cars. Is there enough demand he's got more competition in the Evie space? So retrenching, and then you've got the Chinese threat too. And he's obviously spending time in China is very close to China. There's there's really good quality product coming out of China at very, very low prices. And he may have just realized, now, I can't fight a price war with these folks. I gotta stay with a premium vehicle. So imagine all these things are bouncing around in his head, I think in an ideal world, he would have a cheap car that you can effectively almost give away to folks and subsidize because he was making so much profit off of software. And that has kind of been the vision and what Wall Street analysts have underwritten. And that's why he's got this crazy high valuation compared to their automakers. But I think he's starting to feel the strain of what the business model has to become. And I think that the threat is that he may start being valued, looked upon and valued more like a traditional automaker,
Paul J Daly:you know, there's yesterday in the show, I said, it's, it's very challenging to look at Tesla, like an automaker, it's easy to for one sense, right? They make cars, and that's been their primary product. But when you look at the other verticals, that they're building out, the autonomous robots, the sheer amount of AI data that they have, like visual human interaction data is more than anybody else because of what the cars capture. And so like we've said, Tesla is an energy company. They're a robotics company, they're an AI company, right? There's, it's, which is far more than you could say, for any of the traditional automakers. Right. They are a car company. So he's definitely playing 3d Chess. And so like trying to make sense of this, just through an automaker window, I think is never going to make full sense. But we'll see. It's certainly always entertaining. We'll see what he comes up with in May. We'll see what they release in August. And I guess it's just like with Tesla, we'll see. Yeah, I
Steve Greenfield:think if I had to forecast, I think that, you know, sometime in the next five years, Tesla will split split up the business because, you know, he needs to get rid of the anchor, which is this, this perception that he's an automaker, and then TierPoint, free up, you know, these other assets, you know, where a battery technology company, or a power company, we're an AI company and a robotics company. And I think that you at some point, Wall Street analysts and investors will realize, probably broken up, it's worth more than the sum of its parts. And then he can't be accused of being an automaker, like, get rid of that. And he can say like, look, that was phase one of our growth. Now we're on to phase two, and being an automaker really doesn't really matter anymore. And you know, there's speculation that eventually, once he figures out full self driving, that he'll license that to the other automakers who by the way, have burned billions of dollars and don't see any closer to having a full self driving technology. So we'll see how it plays out but I would not be surprised if like you know, the next five years, you see Tesla effectively start to split up the businesses and unlock value.
Paul J Daly:Right on. Alright, got where we at? Oh, man, we'd like to talk We're having a good time. All right, got two quick stories. So these are new ones. Desert Toyota and Tucson Arizona has agreed to a $60,000 settlement for not honoring advertised prices. The Arizona Attorney General's Office has reported so basically this this store has allegedly left out mandatory accessory costs and reconditioning fees from online pricing, very sensitive topic, but things like exterior protective coating door edge guards, door cups, window tint, etc. Say these are mandatory expenses that were not disclosed as a cost of the vehicle that the customer could not decline. Attorney General Chris myers stressed that advertised prices must include all mandatory add ons. The store did not admit to wrongdoing, but opted to settle them resolve the matter, which is $40,000 in civil penalties$10,000 for customer restitution, and 10,000 illegals fees, and they must now include all mandatory fees and advertised prices and preserve price quoting customer communications, that means they keep every conversation they had for an entire year. Big conversation right now. And this is just one example. I think where an attorney general said, we're going to be a customer complaint Attorney General said we're going to make a ruling.
Steve Greenfield:Yeah, I mean, I think that your transparency for the consumer is tantamount. And I think that dealers for the most part, you know, try as much as they can to represent cars, whether it's online or in the showroom, with with transparency, so good for the dealer to settle and move on. And hopefully, you know, other dealers learn from this and just make sure that they continue to double down on transparency for the consumer. Yeah,
Paul J Daly:I think that that's that's going to be the name of the game. A lot of things going on this year. Cars will going stopping gonna pick back up quite a lot, a lot of coverage. That is so funny how fast that disappeared. Like from conversation. It was all we talked about. And then we got the one ruling. We were actually in DC the day. We got the state and Mike Stan walked into where we were and he told us like before anybody knew about it? And like I felt like within three days no one even talked about. Right, right. Yeah, I gotta hear anything about it at NADA. But it certainly hasn't gone all the way away and we'll be back to it. But yeah, this is just a little a little kind of thing out of Arizona to keep keep the fire burning. last and last but not least last time you were on. We talked about delta shuttling people around in Porsches on the tarmac. I was like great. Another Delta story when Steve's gonna be on yesterday. The big talk, we haven't even said the word until now. But $6 billion worth of consumer spending hit the market due to the total solar eclipse Delta Airlines jumped on the action offering a special flight from Dallas to Detroit aligning with the path of the solar eclipse giving passengers a once in a lifetime experience that 35,000 feet so passengers, excited children Delta employees, they got all this pre flight pre flight party gear. They got you know, solar glasses made by Warby Parker, branded Eclipse bags, moon pies, like all the snacks. And you know, it was basically geared around creating the experience for its customers. Right? It wasn't a big a big initiative. But um, you know, everybody got to see the Eclipse Delta doing what Delta does. I don't know if you got an invite for this. Steve is one of them.
Steve Greenfield:I did not have to admit I did not I did not. But you know, one thing I can't reconcile. So you got on this on the Eclipse yesterday?
Paul J Daly:Yes. Yes, sir. He's we were in the totality. Yeah. So
Steve Greenfield:there's a sun in the sun was like, you know, 12 o'clock noon, sort of, you know, and you're on a plane. How on earth did you look out the windows and look up? I don't really understand how that would have worked. Like, yeah, you have a sunroof or a moonroof on the plane, unless the pilots constantly going swerving.
Paul J Daly:That's what what they said is they took a special flight path, so everyone on the plane can see the sun. So if you say special flight path, the only way you can see one side of the plane, the same thing you saw is a full one at
Steve Greenfield:the Golden Circle. So
Paul J Daly:slightly tipped up, I guess, the sun. I will say from like, I read a number of accounts of being on the flight. And I think that the general sentiment was was like, I'll always remember it, but it wasn't that great.
Steve Greenfield:Yeah, right. Exactly. Because I never actually got to see the sign on the fly. Right?
Paul J Daly:Yeah. Are you in the path at all? Yesterday?
Steve Greenfield:We were close. I think we were at 85% down here in Atlanta. So I didn't get right under but it was cool. It was cool. Definitely a memory and I guess we're not gonna see another one for 20 years or something. So I guess
Paul J Daly:something, something like that. When we watched it at my house, we have kind of like overlooked this like kind of Valley. So we had a really clear view of like, one side versus the other side. So we could see dark on one side and light on the Oh, wow. It was kind of cloudy in Syracuse, go figure. So we were catching glimpses of it as the clouds you know, was a full cloud cover. So it was fun. But the coolest part was how all the birds start chirping. Right. And then all of a sudden we heard this lone rooster somewhere. Just be like I'm about to wake everybody up.
Steve Greenfield:So yeah, Guy signs up signs up for time.
Paul J Daly:I know. Well, good. Good on Delta for getting into that. Steve, as always. Thanks for joining me in the show. I look forward to seeing you in 35 days and we'll touch base with you soon. Let's Got to LinkedIn and start that conversation about who's going to get to 1000 stores if ever right